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Markets Update: APAC equities traded mixed on Wednesday, with gains in South Korea and Taiwan offset by losses in Australia and Japan.
Today's important market events:
[GBP] BoE Gov Bailey Speaks - 15:30 CEST
[USD] Fed Chair Powell Speaks - 15:30 CEST
[USD] Crude Oil Inventories - 16:30 CEST
Global Markets Roundup: 28 June 2023
Softer-than-expected monthly CPI data from Australia added to the bets for the Reserve Bank of Australia (RBA) to keep rates unchanged at next week's meeting.
European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.4% after the cash market closed up 0.6% yesterday.
The dollar index (DXY) is a touch firmer above 102.50, with the Australian dollar (AUD) lagging post-CPI. The euro (EUR) losses were stemmed by further hawkish ECB source reports.
The ASX 200 was positive with nearly all sectors in the green after softer-than-expected monthly CPI data from Australia added to the bets for the Reserve Bank of Australia (RBA) to keep rates unchanged at next week's meeting.
The Nikkei 225 gained amid tailwinds from recent currency weakness and with Japan leaning towards extending support measures for gas and electricity bills set to expire at the end of September as it seeks to underpin the economy.
The Hang Seng and Shanghai Composite were subdued after Chinese Industrial Profits remained at a steep contraction and with the US considering new curbs on AI chip exports to China amid some concerns China could use AI chips from Nvidia and others for weapons development and hacking.
US equity futures slightly pulled back but with the reversal only marginal as markets look to comments from Fed Chair Powell.
European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.4% after the cash market closed up 0.6% yesterday.
The dollar index (DXY) recouped some of its losses after weakening yesterday despite the strong data releases from the US, as models from Citigroup and Credit Agricole pointed to USD selling into month-end, while the attention shifts to the numerous central bank speakers later today including panel participation by BoE's Bailey, ECB's Lagarde, Fed's Powell & BoJ's Ueda.
The euro (EUR) marginally softened overnight although the pullback was limited by the recent hawkish ECB speakers and as the prospect for a September hike gained more traction after sources noted ECB policymakers see little chance of a pause in hikes in July or September citing conversations with rate-setters at the Sintra forum. More recent source reporting has also suggested that some officials at the Bank are mulling a quicker reduction of its bond portfolio.
The pound (GBP) slightly weakened after hitting resistance near 1.2750 albeit with downside stemmed by ongoing hawkish rate bets.
The US dollar (USD) against the Japanese yen (JPY) was kept afloat and retested the 144.00 level owing to the wider yield differentials.
The Australian dollar (AUD) and New Zealand dollar (NZD) were pressured in the aftermath of the softer-than-expected monthly Australian CPI data which added to market pricing for the RBA to keep rates unchanged at next week’s meeting.
In fixed income, 10-year US Treasury futures remained lacklustre after the recent pressure from the firm data releases and post-5yr auction stateside which was not as well received as Monday’s 2yr offering and resulted in the first tail since February.
German bund futures were contained by recent hawkish ECB commentary and ahead of more speakers today at the ECB Forum.
10-year Japanese government bond (JGB) futures tracked the recent downside in peers with demand also subdued by the lack of additional BoJ purchases.
In commodities, crude futures clawed back some of the prior day's losses with mild support overnight following the larger-than-expected draws in private sector crude and gasoline inventories data but with the rebound limited by the mixed risk appetite and as the ongoing hawkish central bank narrative in G10 continued to cast a shadow over the demand side of the equation.
US Private Inventory Report: Crude -2.4mln (exp. -1.8mln), Distillates +0.8mln (exp. +0.8mln), Gasoline -2.9mln (exp. -0.1mln), Cushing +1.5mln.
Russian Energy Ministry said Russia's gasoline exports fell 30% in June from May and Russian refineries' gasoline production was up 3.1% Y/Y as of the last week of June, while diesel production rose 2% Y/Y with reserves at a historical high, according to Reuters.
Spot gold was restricted after the recent upside in yields and as the dollar attempted to nurse losses.
Copper futures languished near yesterday's lows with price action not helped by the downbeat mood in China.
Chile's Codelco said it is still evaluating the impact on operations from stoppages caused by rains in the central-south region, while it also noted that some operations were still halted at the El Teniente mine after rains, according to Reuters.
Highlights for today include EZ M3 Growth, Italian CPI (Prelim), US Mortgage Applications, Speeches from ECB's Lagarde, de Guindos, Lane & Enria, BoE's Pill, Panel Participation by BoE's Bailey, ECB's Lagarde, Fed's Powell & BoJ's Ueda, Supply from UK & US.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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